After receiving a 15-year sentence last week, Terraform Labs’ co-founder and former CEO, Do Kwon, could face another major sentence in a potential second trial if extradited to his home country, South Korea.
Terra’s Do Kwon May Face Second Trial
On Monday, South Korean news media outlets affirmed that the legal troubles of Terraform Labs’ co-founder, Kwon Do-hyung, also known as Do Kwon, may not be over, despite recently being sentenced to over a decade in prison in the US.
According to a report by The Korea Times, government officials and prosecutors stated that the crypto entrepreneur may face a second trial and a major jail sentence in South Korea if he is extradited in the future.
On December 11, Kwon received a 15-year sentence for his involvement in the $40 billion collapse of TerraUSD (UST) stablecoin in 2022. Notably, he first pleaded not guilty in January to a nine-count indictment that charged him with securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering.
However, he changed his stance in August, pleading guilty to conspiracy to defraud and wire fraud and apologizing for his actions. As reported by Bitcoinist, the Terra founder previously requested a maximum five-year sentence at the end of November, arguing that he had “suffered substantially for his crimes,” and that anything longer than that was “far greater than necessary to achieve justice.”
Meanwhile, prosecutors had requested a 12-year sentence for Terraform Labs co-founder’s fraudulent actions earlier this month. US District Judge Paul Engelmayer highlighted the severity of his case last Thursday, emphasizing that the given sentence was “the least” he could impose.
Five years would be so implausible it would require appellate reversal. Others must be deterred. People are watching this [live]. There will be future entrepreneurs. This case will serve as a reminder of breaking bad and what happens.
South Korean Verdict Could Double US Sentence
The Korean Times noted that it is widely expected that the Korean national may apply to the International Prisoner Transfer Program after serving half of his 15-year sentence, as US prosecutors agreed not to oppose such a request as part of the August plea deal.
This opens the possibility of Kwon’s extradition to his home country and a separate trial on multiple charges related to violations of the Capital Markets Act, which could result in additional punishment.
With an estimated over 200,000 victims in South Korea, more than $204 million in total losses, and ten alleged accomplices already on trial in the country, authorities affirmed that “Prosecuting Kwon domestically would best serve efforts to compensate local victims.”
“A guilty verdict in Korea could lead to a sentence of more than 30 years,” a senior prosecutor reportedly stated on Monday.
As the report noted, the financial crime unit of the Seoul Southern District Prosecutors’ Office obtained an arrest warrant for Kwon in September 2022. In March 2023, Montenegrin authorities detained him along with Terraform Lab’s former finance officer, Han Chang-joon, for attempting to travel with fake documents.
Notably, the crypto entrepreneur was under Montenegro’s custody for over a year and a half and faced a four-month sentence, later receiving an extra two months at the request of the US and South Korea, which sought to bring him to justice in both jurisdictions.
The two countries started an extended battle to bring Kwon to trial, with Montenegrin authorities initially approving South Korea’s extradition request. However, he was extradited to the US on December 31, 2024, after Montenegro’s interior ministry signed the request, delaying trial in his home country.
Total crypto market capitalization is at $2.91 trillion on the one-week chart. Source: TOTAL on TradingView
